If you’ve ever said the words ‘I never saw that coming,’ you have experienced a black swan event.
These events are highly improbable, unpredictable by definition and have huge impacts on our lives. But are they really unpredictable? Are they as random or important as we think?
And most importantly, can we improve our thinking to better understand and predict the unknown?
For Nassim Nicholas Taleb, the answer to the last question is yes.
A prominent scholar and risk analyst, Taleb believes that the way we think about risk is restricted and fundamentally flawed. We focus too much on what we know, and not enough on what we don’t know.
In ‘The Black Swan’, he takes on the orthodoxy of statistics and probability theory and offers tricks for handling and learning from unexpected events.
Spotting Black Swans
The book itself often feels digressive and self-aggrandising, but the ideas are good. Taleb convincingly criticises everything from the Gaussian curve and the scientific method, to heuristics and human cognition.
But this isn’t an overly academic or scientific book; there’s no complex discussion or convincing case studies. Taleb is partial instead to a mix of anecdotes, counterfactuals and real-world examples, though his choice of the latter is disappointingly predictable: paragraphs about the rise of Google and the fall of Black-Scholes make several appearances.
Where this book succeeds is in its ability to question how we manage risk, and to offer alternative ways of thinking and using data.
When it comes to managing risk, the challenge, Taleb says, is to use systems of thinking that are ‘antifragile’ and less reliant on known information. Resilient systems of thinking embrace variability and unknowns, and absorb and improve from unexpected events.
Is it worth a read?
Will this book help decision makers and businesses act in a world characterised by black swan events? Probably not. But Taleb’s ideas will provoke introspection and encourage you to focus less on what you know, and more on what you don’t know.
For readers familiar with chaos theory, statistics or the writings of Thomas Kuhn, Taleb’s book says nothing new. But even the most well read among us will find ‘The Black Swan’ to be an entertaining (if not insightful) look into the world of the expectedly unexpected.